Biota Pharmaceuticals, Inc. announced that its Board of Directors has adopted a revised corporate strategy following the recent completion of management's strategic and operational review of the organization and its various development programs. The implementation of this strategy will shift the Company's primary focus from early-stage research to clinical-stage development programs that it could independently advance into late-stage development. Immediate actions will include rationalizing the Company's preclinical programs, a realignment of its operations and resources, and a reduction in its workforce.

Key components of the Company's strategy include, but are not limited to:

• Continuing to fully support and advance the development of laninamivir octanoate for the treatment of influenza A and B infections in the U.S. market under its existing contract with the U.S. Office of Biomedical Advanced Research and Development Authority ("BARDA");• Reducing the number of existing preclinical programs by focusing preclinical activities on developing an oral antiviral for respiratory syncytial virus ("RSV") and an oral/IV antibiotic targeting GyrB/ParE with activity against gram-negative and multi-drug resistant bacterial pathogens;• Concluding preclinical activities related to hepatitis C non-nucleoside polymerase inhibitors and antibiotics for gram-positive bacterial infections, while continuing to pursue out-licensing opportunities for these programs;• Completing the evaluation of various clinical and regulatory pathways over the next several quarters for vapendavir to determine whether to independently continue its late-stage clinical development for the reduction of exacerbations caused by human rhinovirus (HRV) in patients with moderate to severe asthma or chronic obstructive pulmonary disease (COPD);• Pursuing in-licensing, acquisition, co-development, and other similar collaborative clinical-stage development opportunities to better balance its pipeline; and• Reducing its cost structure to provide flexibility to deploy additional resources toward clinical-stage development programs.

"We are taking these steps to establish a strong financial and operational foundation from which to leverage our flu franchise and balance our development pipeline with more differentiated, clinical-stage development programs," stated Russell H. Plumb, President and Chief Executive Officer of Biota Pharmaceuticals, Inc. "This strategy is designed to streamline our portfolio of preclinical programs, conserve capital, and focus our operations on advancing or securing development programs that we believe can best drive shareholder value over the next several years."

The reduction in the Company's workforce will be implemented immediately, reducing the number of its employees and contractors by approximately 30% over the next several quarters. The reduction will be concentrated on research and development functions dedicated to drug discovery, but other areas of the organization, including general and administrative positions, will be affected. As a result, the Company anticipates recording a charge of approximately $2.0 million in the fourth quarter of its 2013 fiscal year (the Company's fiscal year-end is June 30) related to the cost of one-time termination benefits. The Company expects an annual reduction in salaries and benefits of approximately $3.8 million on an ongoing basis.

Based upon the adoption of this corporate strategy, the Company believes that its base burn from operations will decrease substantially in fiscal 2014, and anticipates that its cash, cash equivalents and short-term investments on hand will be approximately $62-$67 million at June 30, 2014. This estimate includes anticipated operating expenses, royalty revenue and revenue under its existing BARDA contract, but excludes the impact of any changes in operating assets and liabilities, costs associated with the potential clinical advancement of vapendavir, as well as any incremental costs associated with in-licensing, acquiring and/or further advancing any new development program. As of December 31, 2012, the Company held $74.1 million in cash and cash equivalents.

In addition to announcing its revised strategy, the Company also provided the following updates:

• The Company anticipates initiating a Phase 2 clinical trial of laninamivir octanoate in the second quarter of calendar year 2013 in the Southern Hemisphere;• Based upon the results of recently completed preclinical IND-enabling toxicological studies, the Company does not intend to advance BTA-C286, its lead RSV fusion inhibitor, into clinical development; however, it expects to continue the preclinical development of several back-up RSV fusion inhibitors in 2014; and• The Company has closed its Rockville, Maryland facility and expects to complete the relocation of its U.S. corporate headquarters to Atlanta, Georgia in May, 2013.

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